Distributed Generation (DG)

Distributed Generation (DG) refers to electricity produced from small-scale energy systems located close to the point of consumption, rather than at large centralized power plants. In the solar industry, DG typically includes rooftop solar, commercial solar, community solar, and other behind-the-meter or near-the-meter PV systems that feed power directly into homes, businesses, or local distribution networks.

DG reduces transmission losses, strengthens grid reliability, and accelerates renewable adoption by enabling customers and businesses to generate their own electricity. It is the fastest-growing segment of solar globally, driven by falling system costs, supportive policies, and increasingly sophisticated design platforms like Solar Designing.

Distributed Generation stands in contrast to utility-scale solar, where power is generated far away from users and transmitted across high-voltage networks.

DG is central to modern energy planning, affecting everything from net metering, interconnection rules, and grid stability to solar proposal modeling and financial projections handled through tools like Solar Proposals.

Key Takeaways

Distributed Generation (DG) refers to small-scale electricity production close to the point of use.
Solar DG includes residential, commercial, community solar, and hybrid systems.
DG reduces grid stress, improves energy independence, and enables customer-owned generation.
DG must be carefully designed to align with utility rules, load profiles, and interconnection requirements.
Tools like SurgePV improve accuracy, design speed, and financial modeling for DG projects.

What Is Distributed Generation (DG)?

Distributed Generation includes any power system that generates electricity at or near where it is used. Most DG solar systems are:

Rooftop residential systems
Commercial or industrial rooftop systems
Ground-mounted systems tied into local distribution grids
Community solar gardens feeding nearby customers
Hybrid systems that combine solar + storage

DG systems typically interconnect at lower voltages (120V–480V or below 13kV) and fall under specific local AHJ, utility, and policy frameworks.

DG is closely connected to concepts such as:

How Distributed Generation Works

Although DG can include many technologies, the process for solar DG typically follows these steps:

1. Solar panels generate DC power

Modules capture sunlight and produce direct current.

2. Inverters convert DC → AC

DG systems rely on Solar Inverters to match grid voltage and frequency.

3. Power flows into the building or facility

The site uses the solar energy first, reducing grid demand.

4. Surplus power exports to the local grid

Exporting depends on local policies like net metering or net billing.

5. Monitoring tracks production and consumption

Systems measure kWh output, savings, performance ratio, and load interaction.

6. DG integrates with grid controls

Utilities monitor DG systems to manage voltage, power quality, and grid stability.

DG systems may also include:

Battery storage
Smart meters
Energy management systems
Load shifting strategies

Types / Variants of Distributed Generation

1. Residential Distributed Generation

Small rooftop solar systems between 2 kW–20 kW.

2. Commercial & Industrial (C&I) DG

Larger rooftop or ground-mounted systems ranging from 50 kW–5 MW.

3. Community Solar DG

Shared solar arrays supplying multiple customers.

4. Hybrid DG (Solar + Storage)

Combines PV with batteries for resiliency and demand management.

5. Microgrid DG

DG systems operating independently or semi-independently from the traditional grid.

How Distributed Generation Is Measured

DG performance and interaction with the grid are measured using:

System Capacity (kW or MW)

Determines generation capability.

Energy Production (kWh/year)

Annual output used in savings and proposal modeling.

Self-Consumption Rate (%)

How much solar energy the customer uses directly.

Export Rate (%)

How much energy flows back to the grid.

Grid Impact Metrics

Voltage rise, hosting capacity, and reverse power flow.

Financial Indicators

Payback, ROI, and net savings modeled with tools like the Solar ROI Calculator.

Typical Values / Ranges

DG systems are designed based on load profiles, roof space, shading, and local grid constraints.

Practical Guidance for Solar Designers & Installers

1. Analyze load data before designing DG

Proper load matching improves ROI and system efficiency.

2. Model grid export rules early

Use DG-specific frameworks such as net metering, net billing, or export limits.

3. Check hosting capacity maps

Prevents interconnection delays or voltage rise issues.

4. Use design automation to accelerate layout

Tools like Solar Designing and auto-layout features help streamline residential and commercial DG workflows.

5. Validate shading and POA values

Use Shadow Analysis to maximize production.

6. Coordinate with utilities early

DG interconnection often requires detailed electrical diagrams—see Stringing & Electrical Design.

7. Incorporate storage for time-of-use markets

Helps reduce demand charges and increase self-consumption.

Real-World Examples

1. Residential Rooftop DG

A homeowner installs a 6.5 kW rooftop solar system.

They consume 70% of the solar energy onsite and export the remaining 30% using net metering.

2. Commercial Warehouse DG

A 500 kW rooftop system offsets a large portion of the building’s daytime load.

Time-of-use management improves ROI further with optional battery storage.

3. Community Solar DG Project

A 3 MW solar garden supplies 300 subscribers across a utility territory.

Participants receive credits on their monthly electricity bills.